The Importance of Mobile in the Future of the Digital Music Industry

Pandora has been at the center of quite a bit of controversy in recent months. Basically it boils down to this: Pandora feels that the rates it pays to artists — and record labels in particular — are too high. Artists, on the other hand, feel the amount they receive from the internet radio service is too low. Despite this, the public company recently reported its second quarter earnings for this year, which shows revenue is up 55 percent, even though net loss increased as well, up 44 percent from the same period last year.

But there is one number that is up even more than those figures: Pandora’s mobile revenue increased 92 percent to $116 million. That number now accounts for nearly three-quarters of the company’s entire revenue.

The Increasing Importance of Mobile in the Music Industry

Certainly the increased mobile revenue for Pandora is no surprise, as the company inherently provides a mobile-centric platform. But this trend toward mobile is certainly not only limited to Pandora, and not even limited to the music industry. However, many companies (and artists) have had trouble using mobile to its fullest advantage, though that may be changing quickly as smartphone and tablet sales continue to rise at huge rates.

In the 14-month period between April 2012 and July 2013, tablet ownership in the U.S. nearly doubled, showing the rapid rise in mobile ownership. With smartphones being quickly adopted as well around the world, the audience for mobile platforms, advertising and campaigns is growing exponentially. Pandora is obviously taking advantage of this fairly new sector of the market, and others in the music industry will likely be doing the same.

How to Take Advantage of Mobile for the Digital Music Industry

Mobile tech can be leveraged by companies and artists alike, and both will be doing so in ever-increasing numbers in the coming years. At this point, the biggest advantage to artists is that they can use mobile to increase the reach of their current social media and online campaigns.

For example, we wrote recently how Matchbox Twenty now has a mobile app that includes geofencing that can identify the exact location of a concertgoer inside a venue. This allows the group to communicate directly with fans with the app during their concerts to build fan engagement, and this will be further refined as technology improves. The group’s manager says he hopes to eventually use geofencing for practices like helping fans find their seats and to offer discounts when they walk near the merch table.

Of course, this is currently out of reach of smaller, independent artists, but it does show a great way of how mobile can be used to increase fan engagement. Likely, as mobile tech becomes more ubiquitous, additional low-cost options will be available to artists to use to help attract and keep fans in the mobile realm.

Again, all the possibilities remain to be seen as technology expands and becomes more accessible to smaller artists, but it is clear that mobile is the wave of the future in the music industry and beyond. Artists and companies will do well to pay close attention to where the trends are headed.